Instead of signing a new agreement and later opening up to financial difficulties, you should look for other options and avoid signing a confirming agreement. For example, if you want to keep your car, you can continue to make payments to the creditor without the possibility of being sued by that creditor. If you had a co-signer for a loan and you want to prevent that co-signer from being responsible for your debts, there is nothing to stop you from continuing to make payments for that debt, even without signing a re-declaration agreement. While there are many things you need to be careful about when thinking about a liquidation bankruptcy without an experienced Tampa insolvency attorney by your side, we`d like to assure you that a new confirmation can hurt your ability to make a fresh start after an insolvency relief. In short, a Chapter 7 debtor should never sign a confirmation agreement and we will tell you why. At the beginning, we mentioned that you can go bankrupt to be the best for your co-signer. This is, if you are ready and able to make full payments for the co-signed debt, as a result of the «deleveraging» (legal amortization) of your other debts by your Chapter 7 case. If you are in debt and have a co-signer, make sure the co-signer is not held accountable. If you apply for chapter 7 insolvency, the creditor can agree to confirm the loan. Further confirmation is required by the agreement of the creditor and the insolvency judge. For debtors in the Tampa Bay area who are considering filing a Chapter 7 insolvency application, it`s important to learn more about confirmation agreements and how they may affect your landfill.

As you may know, under Chapter 7, bankruptcy is also called liquidation bankruptcy, which refers to the fact that a debtor`s assets (or assets that are not discharged) are liquidated to repay creditors. Once the debtor`s assets have been liquidated, he or she may be entitled to debt relief. In practice, this means that any unpaid property is sold, the proceeds are used to best repay their debt, and the debtor will then receive a clean vest for all debts that are resusable. Debtors and co-signers should be aware that if the debtor does not pay the debt, the creditor may attempt to recover the co-signer. The co-signer has some of what happens in insolvency. If the debt obligation is not paid for by a repeatability agreement or insolvency contract in accordance with Chapter 13, the co-signer may be an objective. Fortunately, under Chapter 13, the Insolvency Act allows for a derogation from the rule that one uninsured creditor cannot be privileged over another in the case of co-signatory debts. The debtor may agree, in Chapter 13, to pay in full the unsecured debt of a co-signatory.

This usually helps to protect the co-signer and their creditworthiness. No matter what you choose, your insolvency will not exempt your co-signer from their obligation to pay the debt. The co-signer is considered a «safeguard plan» for the loan. You`re actually saying they`re responsible for the debt if you don`t pay them, even if you don`t pay them because of the bankruptcy. But to get there, we take a closer look at your concerns that your bankruptcy could harm a co-signer, and focus on situations where a Chapter 7 case would alleviate those concerns. On our next blog, we`ll see how a Chapter 13 case would address these concerns in different situations. If you are still late in your payments for the co-signed debt and a Chapter 7 bid would allow you to keep those payments informed, you could probably avoid negative effects on the creditworthiness of your co-signer. .

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